On Thursday, Betsson and the Netherlands Gaming Authority squared off at the preliminary injunction court in The Hague, as the Malta-based online operator sought to prevent the Dutch gaming authority from taking steps against its Kroon Casino and Oranje Casino brands in accordance with the regulator’s recently tightened enforcement policy.

A court case six years in the making

Even though online gaming, with few and limited exceptions, is still illegal in the Netherlands, it has long been recognized by Dutch authorities that regulation of the sector is all but inevitable. As a result, it is widely (and very believably) asserted that in 2011 and 2012 the Ministry of Security and Justice and (the predecessor of) the Netherlands Gaming Authority agreed an unwritten framework with representatives of the online industry that, with certain restrictions, allowed operators to offer their services to Dutch punters in the expectation that online gaming could soon be regulated.

As long as operators would not explicitly target the Dutch market through advertising in print or broadcast media, a Dutch-language website, or a website with a .nl extension (the so-called “prioritization criteria”), the regulator would refrain from targeting these operators with enforcement measures.

The goal of this policy was not only to uphold the existing prohibition on online gaming, but also to ensure that presently-active punters would not be driven toward unreliable operators deemed ineligible for licensing, just ahead of the imminent opening of the market.

Despite the absence of clear legislative progress, Betsson acquired the Netherlands-facing brands Oranje Casino and Kroon Casino in early 2014 for an amount exceeding €100m. These brands were subsequently brought in line with the Gaming Authority’s then-existing prioritization criteria.

Even though the Dutch remote gaming bill passed the Lower House in June 2016, legislative progress in the Senate subsequently stalled. Likely in response to aspersions cast on the willingness and ability of the Netherlands Gaming Authority to enforce the current prohibition on online gaming, the regulator unexpectedly and unilaterally decided to significantly tighten its existing online enforcement policy, in order to “move the political process forward,” as State Secretary Klaas Dijkhoff said at the Gaming Authority’s fifth anniversary celebration.

Included in the Gaming Authority’s latest prioritization criteria are “Dutch-sounding brand names” and “typical Dutch visual elements.” These, as well as other additions to the regulator’s updated prioritization criteria, will make Betsson’s Oranje Casino and Kroon Casino clearly eligible for enforcement action; and are also likely to endanger Betsson’s ability to acquire an online gaming license when, or if, the market does open.

Betsson’s case

In light of this previous history, Betsson is presently arguing that the Gaming Authority’s conduct over the last few years amounted to de facto toleration of its practices and that it would amount to bad governance for the regulator to suddenly and unilaterally change its enforcement policy.

Additionally, the company believes (not unjustly) that existing Dutch gambling legislation is in violation of EU law, which should make national enforcement action impossible.

The Gaming Authority’s defense

According to the Netherlands Gaming Authority, it has “never tolerated” any form of illegal gambling, a point the organization’s CEO emphatically and publicly stressed as recently as this week.

Furthermore, the Gaming Authority’s prioritization criteria have not changed, they only have been “clarified,” the regulator’s counsel also asserted. Moreover, this recent “clarification” was only necessary, it was claimed, because there were no more operators left in blatant violation of the original three prioritization criteria, allowing the regulator to focus its attentions on less blatant violators.

Rather surprisingly, the existence of any unwritten agreement between online operators and the Netherlands Gaming Authority or the Ministry of Security and Justice with respect to enforcement was flatly denied.

Finally, the Gaming Authority asserted that Betsson’s claim should properly be in the purview of an administrative court, rather than in a preliminary injunction court.

Expected outcome

Proponents of regulated online gaming in the Netherlands should certainly not get their hopes up. During questioning, the judge, at times, appeared visibly unsympathetic to Betsson’s line of reasoning.

More importantly perhaps, Dutch preliminary injunction courts are not known for stepping on the toes of administrative courts, let alone legislators who are considering a relevant bill.

It thus seems not unreasonable to expect that the plaintiff’s claim will be ruled inadmissible.

The preliminary injunction court will issue its verdict on 14 September. We will keep you posted.